Our Head of Investigations looks at moves by the UK tax authority to encourage ‘Pandora Papers’ tax evaders to come clean
The UK tax authority HMRC is offering a tax amnesty to UK residents featured in 2021’s Pandora Papers disclosures, the revelations produced by the International Consortium of Investigative Journalists (ICIJ).
At the time, the huge leak of 11.9 million documents revealed the offshore accounts of 35 world leaders, including current and former presidents, prime ministers, heads of state, and more than 100 billionaires, celebrities, and business leaders.
The letters HMRC is sending out are described as “nudge letters,” intended to incentivize those who may have underreported their tax position, offering them a chance to make a full declaration within 30 days of receipt.
Those who do not fully cooperate or fail to come forward face 200% penalties and potential jail time: it’s a heady incentive to come clean.
I believe HMRC’s approach is sensible, given the circumstances. But let’s be clear: investigating UK national tax evaders using offshore companies and trusts to a criminal standard will be a resource-heavy undertaking and likely take many years. Given this reality, seeing how many “tax dodgers” come clean in response to this approach will be interesting.
Tony McClements is Head of Investigations at Martin Kenney & Co (MKS), and a guest lecturer in Fraud and Financial Investigation at the School of Justice at the University of Central Lancashire. He is a 33-year veteran police detective investigating serious & organised crime, specialising in the investigation of fraud since 1998.